1eyeonthefuture
Registered User
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- 85
Yes, will have neg cash flow, however as I say, I see it as a form of pension investment /planning.While it may be a good plan, you would need to look a little more closely at the figures. €900 rent, less mgt charge, less exps, less interest, then 50% tax?
Would you have negative cashflow this ?
I see it as a form of pension investment /planning.
I talked to BoI a few years ago. I had an LTV of 60% an was thinking about an extension. They said they would only fund equity release for very specific renovations. They said you would need an engineer's report from before and after to prove the work had been done, invoices from builders, etc. In the end I didn't go for it. They seemed pretty nervous about the idea of equity being used for anything else other than renovations to the house itself.Has anyone took value out of their PDH of late to finance a BTL? Any regrets, advice etc.??
Thanks Brendan. Totally take your point on board, however if already contributing a good portion of wage to pension and employer broadly reciprocating and both myself and partner on track for quite a comfortable pension, this property coupled with the other RIP would give a property exposure of circa 300k which compared to overall markets exposure at retirement age would be circa 15% of entire. (I'm not counting PDH as I don't see it as an investment).This has to be the biggest financial mistake that people make. "That property is my pension!"
You get tax relief on contributions to a pension fund.
The income and capital gains accumulate tax-free.
When you retire, you can take 25% tax-free and can manage the balance fairly tax efficiently.
If you already own two properties, you should look at maxing your pension contributions instead of exposing yourself further to property and loans.
Brendan
Cheers Gordon, that might put paid to that plan quite quickly!I agree with NoRegretsCoyote.
I don’t think banks do equity release anymore other than for receipted renovations.
Justin, apologies just seeing this now.Hi 1eyeonthefuture,
Yes, that's a relatively easy thing to do.
Only Finance Ireland & Dilosk will allow equity to be used to help fund the purchase of another property.
Other lenders will only allow equity releases towards home improvements(on the proposed property to be secured), debt consolidation, education fees for children etc.
Finance Ireland will only lend out on 1 beds in certain areas - between the canals in Dublin & sometimes, depending on the location/property quality in other areas.
I'm pretty sure Dilosk is not as fussy on location with regards to 1 beds. Dilosk however, won't do buy to let lending in areas with a population of less than 10,000 residents.
The max loan to value on a buy to let is 70% - i.e. 112Ke in your case(i.e. 160Ke x 70%) - which would release 22Ke of equity(112Ke - 90Ke)).
The buy to let rate in this case would be 3.95%.
The max loan to value on an owner-occupied property is 80%.
Finance Ireland's lowest rate is the 3 yr fixed - 2.4%(loan to values of 80% of less).
You can also make penalty-free overpayments on Finance Ireland's fixed-rate products(an annual lump sum of up to 20% of the outstanding principal, during each year of the fixed term).
Depending on how much surplus cash you have leftover each month, you may still be able to clear your new & higher PDH mortgage in 7 years given the scope to make overpayments that you'd have - plus a lower rate than what you are currently paying.
Dilosk, the last I checked, also have the same penalty-free overpayment facility on its' fixed rate products.
Good luck!
justin.griffith@mortgagebrokers.ie
Hi Justin,Hi 1eyeonthefuture,
Yes, that's a relatively easy thing to do.
Only Finance Ireland & Dilosk will allow equity to be used to help fund the purchase of another property.
Other lenders will only allow equity releases towards home improvements(on the proposed property to be secured), debt consolidation, education fees for children etc.
Finance Ireland will only lend out on 1 beds in certain areas - between the canals in Dublin & sometimes, depending on the location/property quality in other areas.
I'm pretty sure Dilosk is not as fussy on location with regards to 1 beds. Dilosk however, won't do buy to let lending in areas with a population of less than 10,000 residents.
The max loan to value on a buy to let is 70% - i.e. 112Ke in your case(i.e. 160Ke x 70%) - which would release 22Ke of equity(112Ke - 90Ke)).
The buy to let rate in this case would be 3.95%.
The max loan to value on an owner-occupied property is 80%.
Finance Ireland's lowest rate is the 3 yr fixed - 2.4%(loan to values of 80% of less).
You can also make penalty-free overpayments on Finance Ireland's fixed-rate products(an annual lump sum of up to 20% of the outstanding principal, during each year of the fixed term).
Depending on how much surplus cash you have leftover each month, you may still be able to clear your new & higher PDH mortgage in 7 years given the scope to make overpayments that you'd have - plus a lower rate than what you are currently paying.
Dilosk, the last I checked, also have the same penalty-free overpayment facility on its' fixed rate products.
Good luck!
justin.griffith@mortgagebrokers.ie
No.Interesting reading back on the thread that the consensus seemed to be that banks would not facilitate equity release (easily). @1eyeonthefuture were the circumstances that you obtained the equity as outlined in your first post? Did you get money for your renovations and for a BTL deposit?
Hey Justin & all.. quick one if I can.Hi 1eyeonthefuture,
Yes, that's a relatively easy thing to do.
Only Finance Ireland & Dilosk will allow equity to be used to help fund the purchase of another property.
Other lenders will only allow equity releases towards home improvements(on the proposed property to be secured), debt consolidation, education fees for children etc.
Finance Ireland will only lend out on 1 beds in certain areas - between the canals in Dublin & sometimes, depending on the location/property quality in other areas.
I'm pretty sure Dilosk is not as fussy on location with regards to 1 beds. Dilosk however, won't do buy to let lending in areas with a population of less than 10,000 residents.
The max loan to value on a buy to let is 70% - i.e. 112Ke in your case(i.e. 160Ke x 70%) - which would release 22Ke of equity(112Ke - 90Ke)).
The buy to let rate in this case would be 3.95%.
The max loan to value on an owner-occupied property is 80%.
Finance Ireland's lowest rate is the 3 yr fixed - 2.4%(loan to values of 80% of less).
You can also make penalty-free overpayments on Finance Ireland's fixed-rate products(an annual lump sum of up to 20% of the outstanding principal, during each year of the fixed term).
Depending on how much surplus cash you have leftover each month, you may still be able to clear your new & higher PDH mortgage in 7 years given the scope to make overpayments that you'd have - plus a lower rate than what you are currently paying.
Dilosk, the last I checked, also have the same penalty-free overpayment facility on its' fixed rate products.
Good luck!
justin.griffith@mortgagebrokers.ie
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